My Dearest Graduates
May 13, 2020


California Governor Gavin Newsom issued an Executive Order on May 6, 2020, enacting sweeping changes to the state’s workers’ compensation system.  The order creates a rebuttable presumption that if an employee is diagnosed with COVID-19 while working outside the home that the employee contracted COVID-19 on the job and is entitled to workers’ compensation benefits.  This order applies to all workers, not just essential workers.



The presumption applies to any worker who reported outside of the home at the employer’s direction and received a positive test or physician diagnosis for COVID-19 within 14 days of the worker’s last day working outside the home.  If the worker received a physician diagnosis, then the diagnosis needs to be confirmed by further testing within 30 days of the date of the diagnosis.



The California Workers’ Compensation Insurance Rating Bureau (WCIRB) previously issued a research brief that looked into the cost of a conclusive presumption for essential critical infrastructure employees.  The annual cost had a mid-range estimate of $11.2 billion.  Newsom’s order created a rebuttable presumption for all employees.  The California Chamber of Commerce issued a statement after Newsom’s announcement stating that the order will unnecessarily and significantly drive up costs for California employers through increased workers’ compensation insurance rates and will shift the cost of this pandemic to employers. 



The WCIRB is accepting comments until May 18 on its proposed rule changes aimed to help employers during the COVID-19 pandemic.  The proposed rule changes include: exclusion from experience rating of workers’ compensation claims directly arising from a diagnosis of COVID-19; reclassification of employees whose modified duties meet the definition of clerical office employees; and exclusion of payments made to non-working employees. 



There are a number of bills in the California legislature that could expand presumption for workers who contract COVID-19.  Different bills would create a conclusive presumption for essential workers, first responders, or hospital employees.  We’ll keep an eye out for any other bills expanding workers’ compensation.


Data Breach


The Federal Trade Commission said Friday that it’s considering changing a decade-old rule that requires certain companies handling health information to publicly report data breaches.  The Health Breach Notification Rule requires vendors of personal health records and related entities that are not covered by the Health Insurance Portability and Accountability Act (HIPAA) to notify individuals, the FTC, and, in some cases, the media of a breach within 60 days after discovery of the breach.  If more than 500 individuals are affected by a breach, entities must notify the FTC within 10 business days.



The Health Breach Notification Rule review is part of the FTC’s periodic review of its rules to ensure they are keeping pace with changes in the economy, technology, and business models.  In addition to standard questions about the Rule’s effectiveness and benefits, and whether it should be retained, changed, or eliminated, the FTC is also seeking comments on issues such as definitions, timing requirements, implications for mobile health apps, and any issues related to COVID-19.  With the rise of telehealth during the pandemic, this could really affect non-HIPAA covered entities.


Making Our Way Around the Country


The Treasury Department sent a letter to Capitol Hill on Monday stating it is concerned proposals to require insurance companies to pay all business interruption claims “fundamentally conflict with the contractual nature of insurance obligations.”  The letter states that while insurers should pay valid claims, requiring them to retroactively cover exposures could destabilize the sector.  A number of states have legislative measures that would require companies to retroactively change their terms of agreement.  There is an effort for the creation of a federal backstop to cover future pandemic risk.



Governor Kay Ivey issued a supplemental state of emergency order meant to protect businesses from what Ivey called “frivolous” lawsuits linked to the coronavirus.  New guidelines began on Monday as the state begins to ease restrictions during the pandemic.  The order would protect health care facilities, businesses, and other entities that are open from being sued if they’re complying with state guidelines on public health.



More than 60% of artists in the U.S. are unemployed because of the pandemic and it has cost more than $4.5 billion in losses to the art and culture industry.  During this time requiring a "feat of strength", we have lost two greats – Jerry Stiller and Little Richard.  Two great artists – a terrific comedian and a founding father of rock & roll.  You will be missed.


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